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Consignment, Reasonable Expectations


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#1 Isculpt

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Posted 27 January 2014 - 11:45 AM

I am fairly new to marketing my work.  I have found a gallery about 3 hrs away that sold my work very well last summer & autumn.  I'm grateful to them, I need them, and I like them.  =BUT!=  The split is 50-50, and I have to pay to ship the work (or else I hand deliver it) to the gallery.  Since a shipment of 3 sculptures that will retail for $600 is gonna cost me $40 to ship, my net of $300 just dropped to $260.  OUCH!  My question is this:  what is the normal arrangement for shipping costs?  Is a 50-50 split on the high end?  The best split I've found at a well respected crafts guild, also several hours away, is 40-60. They don't pay for shipping either.

 

An obvious solution is to send larger quantities of work at once, but the work isn't tiny and requires lots of bubblewrap -- leading to an oversize box, and those oversize shipping charges can really add up. Some of the work just isn't easily shippable, so I've driven it to the gallery.  But that means a long day on the road and car expenses. I have considered that I could just raise the prices to cover the shipping, but that means that I'd have to raise the price on a $200 sculpture to $226, since I need $13 to cover its third of the shipping (and of course the gallery is going to take half of the increase).

 

Any suggestions?  I don't want to get adversarial with the gallery owner.  I really like her, and I really need her gallery.

 

Jayne  



#2 Mark C.

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Posted 27 January 2014 - 12:20 PM

I have had a few consignment galleries about 3 or 4 hours away. I have one now. What I do is try to make most of the drives myself or send my work with friends going that way. (I have lots of small pots remember)so any less packing is best.

When I do have to send UPS shipments I split the cost with them. That is I do all the pack up work and we split only the actual UPS bill.

They get a deal I get them the work-its an OK deal-just suggest this to your outlet owners. If your works makes them $ they will be happy with this setup.

I never just go and drop off work and come home-its always with another pupose even a get away with my wife once.Since this place is out of the way its takes more planning to fit it in.

I have had friends take work over 20 times during the years as well.

Mark


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#3 Chris Campbell

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Posted 27 January 2014 - 04:44 PM

50 - 50 is standard ... Definitely not out of bounds at all.

I would start a conversation with the owner about factoring shipping costs into the selling price of the work. You and she are partners, not adversaries and you have the right to get your shipping costs back.

What happens if she has to ship the work home for her client? My bet is she charges them for shipping.

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#4 Isculpt

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Posted 27 January 2014 - 10:38 PM

Mark, I'm afraid that I don't have the network of folks who would or could run my work 3 hours into the mountains of NC.  Lucky you!  

 

Chris, I may have misunderstood you, but if so, maybe it's given me an even better idea than splitting the cost of shipping with the gallery.  I could present the gallery owner with the retail price of each item along with an extra dollar amount that I will need to be reimbursed when the item sells.  I can suggest that she add that amount onto the retail price, with that amount coming back to me along with my 50% when the item sells.  It would be more work for her, but at least it makes it clear that I'm not trying to shift the burden of paying shipping costs onto her. If she decides that it's too cumbersome a system, at least I will have opened a dialogue.  

 

What do you think?

 

Jayne 



#5 Mark C.

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Posted 27 January 2014 - 11:06 PM

I suggest as I said (When I do have to send UPS shipments I split the cost with them) just ask them as its in your both interests -you may be surprised that they agree.

Mark


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#6 Chris Campbell

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Posted 28 January 2014 - 02:13 PM

How about taking care of your business and let her take care of hers?

"This is my new asking price due to increased costs."

This new price is the $$$ you need to make from the sale of the item.
Then, it's up to her to determine the price she is going to ask.

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#7 Isculpt

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Posted 28 January 2014 - 07:57 PM

Ok, thanks, I get the point. My idea, like most of my ideas, was a little too Rube Goldbergian!



#8 Rebekah Krieger

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Posted 28 January 2014 - 08:38 PM

It's the hardest thing about being a potter, is asking someone to pay for it.  (to me at least) It seems perfectly reasonable for YOU to be the one setting the price, not the shop owner.  


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#9 Rebekah Krieger

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Posted 29 January 2014 - 04:47 PM

I hope I don't seem like I am hijacking this thread- but I was asked to write up a proposal for a consignment. A local coffee shop is considering selling some of my mugs. I was thinking of offering 30-35% of the sale. Maybe even having it at 30% but increase their commission % if they sell a higher volume? What goes into a consignment proposal other than percentage? Would it be my projected retail price range and how often i would come in to re stock their shelves? 


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#10 Chris Campbell

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Posted 29 January 2014 - 06:03 PM

Oh my goodness ... Don't even think of going into this without knowing about consignment!!
You are giving me a heart attack!! : - )

50/50 is what the split is. As it is, consignment is basically stocking their shelves for free.

If they want CONSIGNMENT,
make sure you get a SIGNED agreement that specifies:
What pieces you left with them.
The retail price of the pieces.
The % of the sale price you receive.
The exact dates on which this will be paid.
They are responsible for loss, damage or theft.
How long the work may be kept.
They pay to ship it back to you.
The work is your property until sold.

If they do not agree to a signed contract, take your work home …
even if they are “Nice” people.

In a friendly way, drop in from time to time to make sure they are
still solvent and your work is on display ... not sitting in the back room.

Chris Campbell
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#11 Natania

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Posted 29 January 2014 - 09:30 PM

Actually, I thought that 60/40 was a more common consignment split. I was under the impression that since you are "stocking their shelves for free" (good point), you get a slightly higher percentage. That said, I've had arrangements with both 50/50 and 60/40 for consignment. I really much prefer wholesale, but if I really like the shop or location I feel I should be flexible....



#12 Chris Campbell

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Posted 29 January 2014 - 11:08 PM

Trouble with the 40/60 is that many galleries go broke with this split ... 40% is just not enough money to keep the lights on. Plus you both have a ton more record keeping to do.

Some galleries do make consignment work, but they are extremely well run and know their customers tastes very well.

My basic advice for consignment is to keep the gallery choice local so you can keep your eye on them.
Make sure you have it written in your contract that YOU OWN the work until it is sold. That way if they go broke you don't lose your work to the creditors.
Beware of really nice people who love your work and don't want to sign the agreement.

Chris Campbell
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#13 Norm Stuart

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Posted 30 January 2014 - 12:54 AM

Your warnings about working with galleries on consignment are hardly overblown.

 

The owners of the Glenn-Dash gallery in Los Angeles were sentenced after defrauding artists with work on consignment, and defrauding an oral surgeon investor who put up the purchase money for non-consignment works. 

 

With the non-consignment works the gallery investor expected 50% of the profits on each sale, but the gallery owners would sell the piece and use the money to buy new works and pocket the profits, often as many as six times, before the investor was notified of the initial sale and received his 50% of the profit on that sale only.

 

Many artists came to retrieve their collection of consignment art, only to learn the truth that their pieces had been sold a year or two prior, with the gallery owners pocketing the money.  The gallery owners' activities were heavily informed by their drug usage.

 

A book by Richard Polsky, "I Bought Andy Warhol" relates anecdotes about this particular gallerist.  http://tinyurl.com/ke3tjg7

Even if he owed you money, he was so charming that you'd leave the gallery feeling as if you were the one who owed him.

 

"Owning your work until it is sold" doesn't do you much good when your work is long sold and the money is gone.  You can't ask the buyer to pay twice and you're just one of the many general creditors receiving 8 Cents on the Dollar - if you're lucky.  People who own galleries are usually very, very good at sales - selling themselves to artists and selling art or counterfeit art to buyers.

 

We have one studio member who has unfortunately become interested in a "vanity gallery" which will show your work for an up-front fee in addition to a later 50/50 split.  Maybe it will prove to be on the level, but it doesn't feel right to me.  I suppose it's not a lot different financially from paying to be in an "craft event weekend" but . . .

 

Oh my goodness ... Don't even think of going into this without knowing about consignment!!
You are giving me a heart attack!! : - )

50/50 is what the split is. As it is, consignment is basically stocking their shelves for free.

If they want CONSIGNMENT,
make sure you get a SIGNED agreement that specifies:
What pieces you left with them.
The retail price of the pieces.
The % of the sale price you receive.
The exact dates on which this will be paid.
They are responsible for loss, damage or theft.
How long the work may be kept.
They pay to ship it back to you.
The work is your property until sold.

If they do not agree to a signed contract, take your work home …
even if they are “Nice” people.

In a friendly way, drop in from time to time to make sure they are
still solvent and your work is on display ... not sitting in the back room.



#14 GEP

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Posted 30 January 2014 - 10:54 AM

I hope I don't seem like I am hijacking this thread- but I was asked to write up a proposal for a consignment. A local coffee shop is considering selling some of my mugs. I was thinking of offering 30-35% of the sale. Maybe even having it at 30% but increase their commission % if they sell a higher volume? What goes into a consignment proposal other than percentage? Would it be my projected retail price range and how often i would come in to re stock their shelves?


50/50 is the normal split for a gallery. Even a coffee shop should expect that split. If they are buying wholesale mass-produced mugs and reselling them, they are likely getting an even better markup on those. So asking them to take less than 50% means you are not appreciating the value of what they're providing.

The red flag in your story is that they asked you to write up the agreement. This means they have not carried this type of work before, and might not understand it. Be prepared for a lot of bumpiness. Chris's cautious and vigilant attitude is absolutely correct.

"Maybe even having it at 30% but increase their commission % if they sell a higher volume?"
No, keep it simple.

The only time I was offered a 60/40 split was from a gallery that was launched by a group of artists. They were trying to be artist-friendly with their generous split. They soon proved to be lousy business people. But as I've said on this forum before, I swore off consignment years ago. Mark's successful and productive account is the exception, not the rule.

Proceed with caution!
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#15 Mark C.

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Posted 30 January 2014 - 11:26 AM

I'm tending to agree with above posts

I have two 40/60 galleries left-they are on top of things and I have a 20 years track record with them

I have one 50/50 which is now the norm.-I have been with them over 20 years

I sell out right to two (same owner) bagel /coffee shops-I sell wholesale but this aggreement is unique among all others

let me explani1st I am really good friends with the owner-we fish togther a lot and our frendship goes back way further than our business realationship-I suggest years ago that we sell my mugs in his shop but would put a deal together to sell larger volumes of them.We do this buy keeping the selling price reasonable.

If he would except $5 per mug on say a 15$ mug I would get $10. My mugs sell in 3 sizes there for $20-$15 and $14

This arrangement has worked so well I'm now the best seller of 3rd party items in shop.I do all the stocking there as well. My website drives 1/3 of there web hits now they tell me.

Now I'm not suggesting you try this-I would stick to the same as folks above have stated

I also wholesale outright to a gallery that used to be a 50/50  consign one but I changed the terms after 38 years with them

I had a few issues and this fixed them for me-as I'm in the drivers seat 100%. As I'm older and wiser I tend to either be happy with business or if it sours I'm the one who leave right now.I hold the cards-thats the way with consignment-its a frame of mind.Wholesale is a bit easier.

As I scale back with my carreer shops know how my pottery can really make them some $$ so they treat me well or I leave

Since you are starting out I would lay the ground work as Chris said for a good start-just fit things into your aggreement that fit the situation.

I would aslo write into it if it gets going well theen you can switch to wholesale as that easier for all parties in the long run. Mugs and coffe are a natural so in a year or two change to wholesale  if this takes off-put that in the paperwork now for later.

You cannot put enough into that agreement-truct me-I have seen to many head south go sideways or turn into life long working sales which we all are making money 35 years later.

Mark


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#16 Rebekah Krieger

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Posted 30 January 2014 - 02:08 PM

I am not looking into a gallery. So since it is a coffee shop, all they do is provide small shelf space and they get profit. (i am thinking 8-20 mugs per month?)  If it costs 20-40% of the cost of each piece to make it, and you give away 50%, why would the artist only be profiting 10-20%?? It doesn't make sense to me why the person doing all of the work would profit less than the person simply selling it. I don't feel comfortable pricing my items extremely high because I know that I am not an advanced potter.   It seems the longer one makes pottery, the higher percentage they can earn for profit due to the skill/price increase.  

 

There are some great consignment proposal templates available online. I am comfortable with all of the details other than the percentage.  I have considered giving them 100% profit for every 10th item to keep them motivated about selling.  

 

I would be detailing pay, sales tax burden, stocking, pick up of items when agreement is over, etc. 


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#17 Chris Campbell

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Posted 30 January 2014 - 02:28 PM

I am having a hard time following your logic. What kind of a split are you thinking of?

Also saying that all they are doing is giving you a shelf isn't quite accurate ...
They are giving you retail square footage in an existing business that draws in customers ... They are paying staff,rent, utility bills and taxes etc. ... so the space is of value to them income wise.

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#18 JBaymore

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Posted 30 January 2014 - 02:53 PM

Chris has it right, as usual.  And the space has value to YOU as the potter.  But only you can decide if that "value" is right.

 

Also be careful of understanding what the term PROFIT actually means.

 

Profits is the margin added to a product or service AFTER all of the other aspects have been covetred.  One of those ogther aspects is paying a fiar wage to the workers (usually..... yourself).  The wage you make is not "profit".  It is your paycheck for the work.

 

Profit is the extra "on top" that is added to factor in that YOU are taking all the financial and time risks on the venture.  It is the money that drives potential expansion or new ventures. 

 

Unfortunately most potters I know do not tend to add in ANY "profit" into their pricing equations.

 

best,

 

..............john


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#19 Rebekah Krieger

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Posted 30 January 2014 - 08:03 PM

The part that has me shocked is that it is generally expected that I, the creator of the product, would make less money than the seller of the product.  I understand business and it's terms perfectly. I ran a business for 10 years and trained hundreds of people in sales.  The difference between this and my prior experience is that before I would sell an item for $18- and i would have to give the wholesaler $9 (50%) but then I would of course have expenses just like the coffee shop owner in the case I am questioning.  The problem I am having is that before the items I would sell would cost less than $.50 to manufacture, and of thousands of the item would be produced per day. They would of course pay for the employees to manufacture it and the building etc, but the rate of production was so high that they made a LOT of money.  I look at a mug that would retail $15, and think about how it costs me around $4 for the supplies and electric to make it.  If I gave the shop owner $7.50 which is being suggested  (who has a viable business, he makes his money selling coffee, but also has a lady who sells her locally made granola bars through his shop) That leaves me with $3.50.  I am just shocked that the shop would keep double what I do.  I have read many discussions here about not putting items on sale, and items costing what they do, I was under the misconception that that concept went for everybody, not just the direct consumer. Thanks for all the answers. :) 


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#20 Chris Campbell

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Posted 30 January 2014 - 08:15 PM

Might I ask how one mug could cost you $4 to make? If you are factoring in your labor that's a different story but could you show us your math?

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